Page 173 - International Taxation IRS Training Guides

Transition
Tax: Deferral Elections

and owners of domestic pass-through
 US shareholders

that are US shareholders may elect to pay the
entities
transition tax
in interest-free installments over 8 years

due in each of the first 5 years,15% due in year 6, 20%
• 8% of the tax
due in year
7, and 25% due in year 8
• Tax deferred may
be due sooner if an acceleration event occurs, but
not accelerate payment of
in some cases, an acceleration event will
a transfer agreement is timely filed
the tax i f

 Shareholders
of S corporations that are US shareholders
may
elect to defer payment of the transition tax indefinitely
a triggering event occurs
until

• In some cases, a triggering event will
not accelerate payment of the
a transfer agreement is timely filed
tax i f

• If a triggering event occurs and continued deferral is not possible, the
US shareholder
may elect to pay the tax over 8 years

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